The price of the leading altcoin Ethereum (ETH) fell again on Wednesday. However, there are signs that professional traders are warming up to the asset as the much-anticipated “Merge” approaches. Here are the details…
CoinShares data: Fund inflow increases for leading altcoin
Fund manager CoinShares reports in its digital asset fund flows weekly report that Ethereum-based products have seen entry for the third week in a row. There was an inflow of $7.6 million for institutional Ethereum funds. On the other hand, those for Bitcoin (BTC) continued to exit with a loss of $ 1.7 million. Citing Ethereum funds, CoinShares said:
The entries have endured 11 consecutive weeks of exits, peaking the 2022 exits at $460 million. Thus, there appears to be a modest return in sentiment.
He added that the change in sentiment could be due to an increased likelihood that the Merge will happen later this year. Merge is a highly anticipated Ethereum upgrade that changes the consensus mechanism from proof of work (PoW) to proof of stake (PoS). It is currently preparing for a final test run. Merge is expected to happen before October.
Loss in Bitcoin-based funds
In late June, institutional investors began returning capital to Ethereum-based funds for a week. Meanwhile, record outflows of $423 million were seen, mostly from Bitcoin-based funds. Over the period, there was a total inflow of $14.6 million, but short Bitcoin funds generated $6.3 million. This shows that investors are still bearish against the biggest cryptocurrency. U.S. funds and exchanges saw a similar percentage in the week ended July 8, totaling $8.2 million, of which 76 percent were short positions.
Institutional investors’ warming to Ethereum was not reflected in the asset’s spot price today. According to CoinGecko, ETH is currently trading at $1,047, down 2.9 percent over the past 24 hours. It lost 28 percent last month. Meanwhile, the cryptocurrency community on Twitter is busy debating whether ETH should be classified as a security. Bitcoin maximalists sided with MicroStrategy CEO Michael Saylor, who last week said that ETH is “clearly” a security. However, the issue has been widely discussed by Ethereum advocates, including Vitalik Buterin.
At the time of writing, Ethereum (ETH) is trading at $1,071, up 0.2 percent. In the last seven days, it has experienced a decrease of 5.6 percent. Altcoin ranks second with a market cap of $128 billion.
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